Co-Op marketing boss talks exclusively to The Drum

There was an aligning of planets really. They were ready to sell, there was a limited choice as to who they could sell to given competition issues. There were lots of suitors but we were the ones who they potentially could sell to without upsetting the competition commissioners.

More importantly, we wanted to buy it because it had a good strategic fit for the type of business that it is and its geographical locations as it’s quite strong in Scotland and the south east where we were less strong. Its store format is similar to ours and actually there aren’t too many supermarkets like those with a convenience offer. It was at the right price and it’s been a terrific acquisition for us.

The stores are being rebranded as Co Operative stores. We’ve already started that process having done in the region of 200 already. Probably by the end of next year they will all be converted to Co Operative.

In terms of market share we are now the fifth largest player in the grocery industry with a marketshare of around eight percent which real clear, blue water between ourselves and Waitrose which has around four percent.

And how will consumers benefit from this deal and what will they see in-store?

What’s great about what has been generated from this acquisition is that we have increased our buying power, there is a lot more volume going through our business and this way we are investing heavily in, not just the fabric of the store and making them a more potent place to be, but we are investing in the pricing of products. So what you end up with as a consumer is getting better offer on products alongwith a nice ambience to be in at a price that is as cheap as Somerfield. What we’re doing with the Somerfield stores is that people in those stores are actually paying less for their baskets of products that they were when it was Somerfield. Our job is now to make sure that people understand that and that the perception matches the reality.

The refitted stores will see very modern gondolas, new shelving, the offers well presented, they will see products on shelves – we have invested heavily in product development whether that is Simply Value to Irresitable which is our premium range. You will also see quite clear promotional activity. We’re still heavy on our promotional activity aimed at the consumer where it is the relevant offer at the right price.

What messages will be relayed to consumers from that?

What they will get from that, which is clear across all of our group offering, and not just Somerfield, but refitted Co Operative stores, is that they see a modern, vibrant business. We are every bit as good as Marks and Spencer’s or Tesco, or Waitrose at offering quality goods to the consumer at a value-for-money price.

How much have things changed in recent months?

I think there has been a big cultural shift. The mass that we now have has given us a critical mass which allows us to feel confident to compete with the major players: Tesco, Sainsbury, Waitrose, etc. That newfound confidence is ‘carrying the swing,’ to use the baseball term.

We have a momentum behind us which everyone is thriving upon and we’re not shy and retiring at all any more. Once we were called ‘Sleeping giants’. Well now the giant has woken from its slumber and our competitors are reacting to us and we’re very much on the radar. We thrive on that competition and we are confident that we are the best convenience store retailer in Britain and that is proven by over 3,000 stores, more than anybody else on the High Street.

...Future plans to grow?

We always look to grow the business, I don’t think that you can ever afford to stand still. You either go backwards or you go forwards and we are very much going forwards and not just in food but across our other businesses where we’ve diversified organisation, although food is clearly the dominant player in our portfolio.

We are continuing to strive forward, not just with the consumer retail offer, but also in what we are doing in our social goal agenda which we very much dovetail into the offer. We’re not always about price or promotion, we’re very much about what we’re doing in the community, for Fair Trade, for instance, or the Climate Change agenda. We work on multiple fronts. We’re not as one dimensional as our competitors are, which gives us our competitive edge.

How important is community still to the Co-Operative Group and how does it remain a part of the community? 


Our social goal agenda is very much the DNA of this business and our ownership model will ensure that that is never changed. It was like that 165 years ago when we started the business, it will be like that in another 165 years because our members, who own this business, mandate to the management team about how we operate and our members are from those communities and they own the business. We are inextricably linked to the community, so it’s not a passing fad where we think that we’ll throw a few pounds into a community because it’s good for our marketing promotion. We have to do it because those people within those communities own this business, not some business manager in the city who’s being paid to lead the strategy of the business. The people, the 5.5 million members who own this business, help us run it. It’s not a marketing ploy, it’s part of how the business is run. We can’t avoid it. 



You’ve recently built a new website for the membership service, how will that strengthen the service?

The new website is really about making it easy for our members to see what we are doing in their communities. Sometimes it’s very difficult with money and it has to be demonstrable in other ways other than pounds, shillings and pence. Our members are very actively involved in the community and our business, they can get together through the website, share ideas and see what is happening in their area and get involved. It’s very much an engagement piece, which is really what we’re about in the first phase of our brand programme. Our first phase was to refit the stores and have a £1.5m investment in making their stores more enjoyable to shop in.

We had the big Bob Dylan campaign last year which was really about telling people that we have now changed, that we are different and to come and see us for a second time. The third phase in the brand programme is to make it relevant and to engage with our consumers to really lock them into the brand and if you don’t do those three things, what you end up with is a froth. Here’s a shiny new toy for a while but it doesn’t really mean anything to you. We are making it very meaningful in the third phase of our activity to our consumers and our members. 



You no longer work with McCann Ericsson which was behind last year’s campaign, why did that parting of the ways take place?

It’s horses for courses really. McCann Ericsson are extremely good at what they did for us, in terms of the Bob Dylan ad and we worked with them for a number of years. We’ve moved on in terms of our activity and our focus and I’m a firm believer in having the right team for the job, and TBWA\Manchester are now working for us as our lead agency here in Manchester and they were the ones who were chosen to take us forward.

That was a massive coup for TBWA\Manchester to be named lead creative agency. What have you tasked them with doing in terms of leading the creative roster? 


As lead agency there is an important role to play in terms of the communications strategy that we have for the overarching brand. They’re working closely with us on getting our message across in what is a very competitive and noisy market place. Our competitors have much bigger budgets than we do.

They’re tasked to be scalpel like in their approach to ensure that we are resonating with our consumers and in a way where our voice is heard loud and clear and not and lost in the melee. They are working closely with us in that strategic planning and position process and they have an important role in coordinating the other agencies to make sure that any other work that is going on at lower levels is consistent with the overarching brand strategy.

Why was the decision taken to streamline the creative roster? 



There were a number of reasons really. These things tend to grow top heavy if you don’t control them and that’s what had happened. The reason we needed to streamline it, the main reason, was consistency of message. We’ve had somewhere in the region of 36 agencies and with that you can begin to see small nuances creep into the brand. If you let that carry on it’s not very long before you’re so divergent from where you should be that every little incremental difference paints a very confused picture.

Now that’s where we were 10 years ago with a very confused brand with lots of difference faces, lots of different logos, it was very confusing for the consumer and I was conscious of the fact that I didn’t want to go back to those days having made such great strides towards a consistent and coherent brand message.

We want to rationalise the agencies to get brand consistency across our very diversified business. The reason for the change in the first place is because we are so diversified, we have 12 businesses so it’s easy to have ‘pet’ agencies creeping in all over the place when we could use some consistency and conformity. The other reason is of course cost and we’re spending a lot of money across a lot of agencies and therefore you consolidate that.



How difficult was that streamlining process with so many involved? 


It was protracted. It was not easy, but it was something that needed to be done and our procurement team did a great job for us and did a lot of the leg work. Getting through all of those contracts is never easy but it was worth all of the hard work in the end.

We now have very clear mandates for our agencies and where they slot into the services that we offer and how they slot into our business. There is a cohesion about them. We have a very Co-operative – surprise, surprise – approach to how we work with agencies and how we expect our agencies to work with other agencies within the business and that was spelled out to everybody during the pitch process. It’s worked out pretty well although it was a protracted and sometimes laborious and painful process to go through and one that was worthwhile.

Yet you went straight into reviewing the media account. What stage is that process at? 



That’s still ongoing. The media account was always due for renewal. I’m not going to comment on it other than say that the process is ongoing and we’re hoping to finalise that within the next couple of weeks. 



There has also recently been a restructure of your marketing department. How does that now operate? 



The team that we had in place was doing a fantastic job, but it was very much a project team and as with all projects, they come to an end and you need a business as usual focus. Having got the refit in place, everyone in the right uniform, staff trained to brand standards, the delivery of the major rebrand which launched the new Co-Operative then it was time for me to turn around and say ‘That’s the job over, job done. The Elite Squad has done its job, now where do we go from here?’

Where we go to is looking at brand propositioners and the team that I have in place are wholly consumer focussed. Not focus on what the uniforms look like or what should the brand standards be or mystery shopping. They are totally immersed in understanding customers and now I have given them a remit to make sure that they become evangelists in consumer segments that we’re targeting.

This is very much a grounded approach to say ‘Let’s not give customers say we want to give customers what they want and give them products that are irrelevant to them. Let’s actually spend the time and effort in understanding how these consumers behave, what their preferences are, what their influences are, what media they go through. And once we have got that in-depth understanding, which is unique in many retailers – although many will say they do it, they don’t – we will carry on with that process and then, when we do come to launch our marketing campaigns, and our products, and our services then hopefully they will hit the target and hopefully we will be more relevant than our competitors and that will attract consumers and drive our sales and allow us to invest more in communities and our social goals programmes.

What can we expect to see come out of the Co-Operative Group in the near future?

The products team will be promoting their products, goods and services. Towards the back end of this year we will see our connections made with in-store communications with our consumers around demographics. Essentially what we will have is related communication in-store and broadcast media, pertinent to the sectors from the last marketing approach which will be more targeted. We will map stores depending on our target audience who will get the appropriate communications.